INDIA’S MINING SECTOR REFORMS

Rajasthan holds immense potential for potash mining, with over 95% of the country’s estimated reserves found in the state.

In May 2025, India auctioned its first potash block, marking a significant reform step in boosting mineral self-sufficiency and attracting private investment.

  • This milestone aligns with India’s broader push to transform the mining sector into a key pillar of economic growth and resource security.

Key Reforms Transforming India’s Mining Sector:

1. Legal and Structural Reforms:

  • MMDR Amendment Act, 2015: Replaced discretionary allotments with transparent auction system, introduced District Mineral Foundation (DMF) for local area development.
  • MMDR Amendment, 2021:
    • Removed end-use restrictions for coal mining.
    • Extended mining leases to 50 years.
    • Introduced Composite Exploration-cum-Mining Licences (CEMP).

2. National Mineral Policy (NMP), 2019:

  • Emphasizes sustainable and scientific mining.
  • Promotes private sector participation, ease of doing business, and adoption of AI, blockchain and drone tech.
  • Focus on value addition and downstream industries.

3. Coal Sector Liberalisation:

  • Commercial coal mining allowed from 2020.
  • Focus on coal gasification and liquefaction for cleaner use.
  • PARIVESH Portal: Single-window clearance for faster environmental approvals.

4. Technological Innovations:

  • Khanan Prahari App: Enables citizens to report illegal mining.
  • Satellite monitoring, Mining Tenement System (MTS), faceless filings, and NGDR (12,000+ public geological reports) improve transparency and compliance.

5. Exploration Boost:

  • National Mineral Exploration Trust (NMET) funds advanced exploration.
  • Exploration Licence (EL) regime encourages MSMEs and startups.
  • National Critical Minerals Mission (NCMM) launched to secure strategic minerals like lithium, cobalt, REEs.
  • Offshore mineral mining initiated for seabed resource exploitation.

6. Sustainable Mining Measures:

  • Star Rating System assesses mines on environmental performance.
  • Mine closure plans made mandatory for rehabilitation.
  • Promotion of M-Sand (manufactured sand) to reduce pressure on rivers.

Significance of India’s Mining Sector:

1. Economic Driver:

  • Contributed 97% to India’s GVA (2023–24).
  • Generated ₹4 lakh crore in state revenues via auctions and royalties.
  • Leading states: Odisha (44.9%), Chhattisgarh (13.9%), Jharkhand (4.1%), Maharashtra (3.9%).

2. Industrial Backbone:

  • India produces 95 minerals, including fuel, metallic, non-metallic, atomic, and minor minerals.
  • Supports sectors like steel, cement, chemicals, fertilizers, and electronics.

3. Employment and Rural Development:

  • DMF Trusts fund education, healthcare, and livelihoods in mining regions.
  • New exploration licenses for startups and MSMEs create rural jobs.

4. Energy Transition Enabler:

  • Domestic exploration of critical minerals reduces import dependence.
  • Potash mining enhances fertilizer security and boosts food self-sufficiency.

5. Strategic and Global Role:

  • Auction reforms and offshore mining increase private and global investor confidence.
  • KABIL’s global ventures (e.g., lithium from Argentina) ensure strategic autonomy.

Key Challenges in the Mining Sector:

1. Regulatory Delays & Bureaucracy:

  • Tribal land rights and local opposition (e.g., FRA 2006) hinder project approvals.
  • Frequent policy changes (e.g., export bans, royalty tweaks) cause investor uncertainty.

2. Illegal & Unscientific Mining:

  • Illegal mining in Jharkhand, Goa, Rajasthan; rat-hole mining in Meghalaya causes accidents.
  • Environmental degradation, water pollution, and forest loss due to poor enforcement.

3. Low Exploration & Data Gaps:

  • Only 10% of India’s geological potential
  • Under 1% of global exploration budget is spent in India.

 4. Logistics & Infrastructure Bottlenecks:

  • Poor road, rail, and power infrastructure in key mining belts.
  • Port limitations hinder mineral exports.

5. Import Dependence for Strategic Minerals:

  • India imports:
    • 100% lithium, cobalt, nickel
    • 60% graphite

6. Social & Environmental Conflict:

  • Protests over mining in tribal/forest areas (e.g., Niyamgiri Hills).
  • Poor DMF implementation, leading to unmet rehabilitation goals.
  • Unsafe working conditions and frequent accidents.

Way Forward:

1. Boost Exploration & Private Participation:

  • Increase funding for GSI and NMET.
  • Offer tax breaks, fast-tracking, and revenue-sharing to attract private investment.

2. Infrastructure Modernization:

  • Develop mineral corridors, strengthen mine-to-plant rail/road connectivity.
  • Expand port capacity in Paradip, Vizag, Mormugao for mineral exports.

3. Tech & Data-Driven Mining:

  • Use AI, drones, geospatial mapping, and open mineral databases.
  • Promote automated drilling, zero-waste mining, and clean tech R&D (e.g., coal gasification).

4. Curb Illegal Mining and Corruption:

  • Expand satellite surveillance, empower Khanan Prahari App
  • Strengthen whistleblower protection and penalize violators.

5. Secure Critical Minerals:

  • Expand global mineral partnerships in Africa, Australia, Latin America.
  • Develop domestic processing/refining capacities for strategic resources.
  • Implement a National Critical Minerals Policy.

With structural reforms, transparency, and sustainability at the core, India’s mining sector is poised to drive economic growth, energy transition, and strategic self-reliance. Addressing challenges like illegal mining, exploration gaps, and social conflict through integrated policies will ensure mining becomes a pillar of Viksit Bharat while protecting the environment and communities.

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